top of page
  • Writer's pictureAlfio Bonanno

The Strategic Role of HR in Small Businesses: A Short Guide

Strategic Role of HR in Small Businesses: A short Guide

In the fast-paced world of SMEs, the role of Human Resources (HR) is often underestimated. However, HR is more than just hiring and firing; it's a strategic partner that significantly contributes to business success. HR can be a strategic partner in several ways:

  1. Talent Management: HR plays a crucial role in attracting, retaining, and developing talent. They ensure that the company has the right people with the right skills and the right motivation to achieve its business objectives.

  2. Organizational Development: HR helps shape the company culture and improve organizational effectiveness. They implement strategies to increase employee engagement, productivity, and satisfaction.

  3. Compliance and Risk Management: HR ensures that the company complies with employment laws and regulations. They help mitigate risks related to employee relations and workplace safety.

  4. Strategic Planning: HR contributes to the company's strategic planning by aligning HR strategies with business goals. They help the company adapt to changes in the business environment and prepare for future challenges.

The HR Challenge in SMEs

With limited resources, SME owners often juggle multiple roles, including HR responsibilities. This can distract from strategic tasks crucial for business growth.

According to a survey by Breathe, an HR software provider, small businesses in the UK spend an average of 80 minutes each week on administrative tasks, while micro businesses spend nearly an hour. This time could be better spent on strategic planning, business development, employee development and wellbeing.

The survey also revealed that 24% of businesses found it harder to manage holiday and sick leave while working from home. Furthermore, 39% reported that providing health and wellbeing support was a major difficulty during the pandemic with this trend continuing into 2023, with employee work-life balance and mental health being a crucial factor in job satisfaction, with a direct impact on important organisational metrics such as employee retention/turnover, absence and, ultimately, performance . These challenges highlight the need for professional HR support on both proactive as well as reactive level to ensure SMEs and their workforce can grow effectively.

Legal Risks of DIY HR

DIY HR management can expose businesses to legal risks. Employment laws are complex and constantly changing. Non-compliance can lead to hefty fines, lawsuits, and reputational damage. Professional HR support can help mitigate these risks, ensuring compliance with employment laws.

EthosHR Consulting: Your HR Solution

EthosHR Consulting understands the unique HR challenges faced by SMEs. We offer tailored services, from setting up an HR function to providing ongoing HR support. Our experienced team can help you navigate employment law complexities, manage your workforce effectively, and foster a positive work environment.

With EthosHR Consulting, you can focus on growing your business, knowing your HR needs are in expert hands. Contact us today to learn more about our flexible, cost-effective HR solutions.

31 views0 comments


bottom of page